If you are a young person, just starting out, and you don’t have any credit yet there are many ways that you can build good credit, but some strategies are safer than others.
Here are a couple of safer credit building strategies:
One safe credit building strategy you can use is to take out a starter loan, and do not spend the money!
Put the money in a safe place and only use it to pay back the loan. You want to pay the loan back completely after 3 months, and then take out another loan and restart the whole process all over again. This will look really good on your credit report! You can keep up a really good credit score by continually doing this strategy!
In addition, when you take out a starter loan, the financial institution will probably want some collateral, check with the financial institution beforehand to find out what kind of collateral they require.
Then if you can afford to, go out and purchase new, the types of items you need for the collateral and then do not ever open or use them. Just put them on the loan application as the collateral. This way if an emergency happens and you cannot pay back the loan you don’t lose anything important to you, except your credit rating.
Gas Credit Cards
Another strategy that is relatively safe for building good credit is to get a gas credit card, but make sure you pay it all off every month or you could get into bad debt. Gas credit cards are safer than regular credit cards, because you are limited on what you can buy with them. Therefore, you will not be tempted to overuse it as easily.
These credit building strategies are safer than most others, but you must still be responsible or you could still get into some serious debt.